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| Bank of Beirut |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25948 |
| Company name | Bank of Beirut |
| Country | Lebanon |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | February 22, 2007 |
| Projected board date | March 26, 2007 |
| Previous Events | Signed: June 15, 2007
Approved: June 14, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The purpose of this project is to provide Bank of Beirut (the Bank or BoB) with an SME Risk Sharing Facility of up to $25 million that will help increase access to finance to private sector companies and individuals who were adversely affected directly and indirectly as result of the conflict suffered Lebanon last summer. The project is part of the Lebanon Rebuild Program involving up to 5 banks for a total of $200 million to be mobilized support to private sector enterprises affected by the conflict.
Bank of Beirut was incorporated as a commercial bank on August 19th, 1963, and is subject to regulations and supervision by the Central Bank. |
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| Project sponsor and major shareholders of project company |
Bank of Beirut is listed on Beirut Stock Exchange. As of 30/11/2006, its shareholding structure was as follows:
- Salim George Sfeir: 3.6947 %
- Fawaz Mohd Naboulsi: 3.6947 %
- Nar Aram Khachadourian: 10.3448 %
- Emirates Bank International: 9.8091 %
- Antoine Abdel Massih: 7.3892 %
- Anwar Mohd El-Khalil: 0.8979 %
- Abdallah Fahed Al-Moughayel: 0.0002 %
- Adib Milad Salamoun Millet: 0.0002 %
Total Directors: 35.8309 %
- International Century Corporation S.A. Luxembourg: 31.6585 %
- Millet & Millet Inc.: 11.3495%
- F.Y.Moughayel Sons Ltd.: 4.8518 %
- International Century Corporation Lebanon SAL: 3.0993 %
- Others: 13.2100 %
Sub Total: 64.1691 %
Total: 100 % |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated at $25 million as an SME Risk Sharing Facility. |
| Location of project and description of site |
| Headquartered in Foch Street, Bank of Beirut Building; Beirut Central District , Lebanon, the Bank runs 41 branches in the country. |
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| Anticipated development impact of the project |
- Maintain and/or increase bank lending:
With the destruction and economic downturn in Lebanon, private banks may reduce their loan exposures at the expense of SMEs, corporations and consumers. Any such reduction would cause loss of jobs and increases in the poverty rate. The proposed IFC investment should help maintain and/or increase bank lending to these groups as well as maintain the economic well being of the underlying communities and stakeholders.
- Support for the private sector lending to SMEs and corporate clients:
SMEs and corporate clients make up a large share of Lebanon’s economic output and provide vital contributions to employment generation in impoverished areas. Increased access to finance in these target markets can help re-boost under-funded enterprises. |
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| IFC's expected development contribution |
IFC’s role, is to provide a range of interventions over the near and medium term in post-conflict Lebanon, such as the risk sharing initiative. This facility, and by indirectly supporting private companies will help the economy to restart and avoid economic downturn caused by the conflicts.
IFC’s Lebanon Rebuild program is designed to be an effective and timely response to support the private sector through the anticipated difficulties as a result of a recent conflict. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC will analyze the Bank's portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Requirements, if any, that would include a combination of:
- The IFC FI and/or Microfinance Exclusion Lists; and/or
- The applicable National Social and Environmental Laws and regulations.
IFC will also review, if required, the capacity of the Bank to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.
Based on the review, Bank of Beirut will be required to:
- develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC and Bank of Beirut;
- identify responsible, qualified persons to manage and implement the SEMS;
- commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Requirements;
- commit to take action to remedy any gaps in SEMS implementation on an ongoing basis;
- submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Mr. Najib M. Semaan, Assistant General Manager
Foch Street, Bank of Beirut Building
Beirut Central District
Telephone: +961 1 970 232
Fax:+961 1 970 236 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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